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Antam Battles Bumi for Control of Zinc, Lead Mine (Update5)

By Naila Firdausi and Madelene Pearson

Jan. 30 (Bloomberg) -- PT Aneka Tambang and a Chinese

partner offered A$505 million ($449 million) in cash for Herald
Resources Ltd., topping a bid by Indonesia's largest mining
company to gain control of a lead and zinc project.

Antam, as the nickel mining company is known, and zinc

producer Shenzhen Zhongjin Lingnan Nonfemet Co. offered
A$2.50 a share, Perth-based Herald said in a statement. The
stock closed above the price, signaling some investors expect a
higher proposal. PT Bumi Resources had bid A$2.25.

Herald waited two years for approval for the $192 million Dairi
mine. A joint bid by Antam, majority-owned by Indonesia's government, and Zhongjin Lingnan may
ensure the project goes ahead to meet rising metals demand from China.

``It would be easier for Antam to get all the necessary licenses than Bumi, considering'' it's owned by
the government, Freddy Hendradjaja, who helps manage $581 million at PT Danareksa Investment
Management including Antam stock, said in Jakarta. ``Chinese companies are trying to find sources in
other countries as demand grows and supply is strapped.''

Herald rose 8 cents, or 3.2 percent, to A$2.58 on the Australian Stock Exchange at the 4:10 p.m.
Sydney time close. Antam shares jumped 11 percent to close at 3,600 rupiah in Jakarta. Bumi, also the
country's largest coal producer, fell 3 percent to 6,400 rupiah.

Antam is Indonesia's second-largest nickel mining company by market value, and Zhongjin Lingnan is
China's fourth-biggest zinc producer.

Antam Diversifying

Herald's board unanimously recommends the joint bid in the absence of a higher offer, the company
said in the statement to the Australian exchange.

Jakarta-based Antam wants to reduce its reliance on nickel, which contributed 88 percent of sales in the
nine months to Sept. 30. The company last year signed a $1.5 billion accord with United Co. Rusal, the
world's biggest aluminum producer, to build an alumina plant, and has said it wants to buy gold mines.

Bumi made its hostile offer last month after talks with Herald over a six-month period faltered. A
successful bid would be the second-largest Indonesian takeover of a foreign company.

``We are watching and waiting for full details,'' said Dileep Srivastava, head of investor relations at
Bumi. ``We continue to retain our interest in Herald and are happy to hold about 20 percent at a
discounted price.''

China Demand

China is the world's largest consumer of zinc, used to galvanize steel, and lead, used in car batteries.
Lead has climbed 65 percent in the past 12 months in London as consumption outstrips production,
while zinc has dropped 30 percent because of increasing global stockpiles.

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``This is the first time Zhongjin Lingnan has looked to expand overseas,'' said Ren Yunhe, a Shanghai-
based analyst at Shenyin Wanguo Securities Co. ``The acquisition target looks attractive according to
the reserve prospects provided in the statement.''

Dairi, located in North Sumatra, is forecast to produce 220,000 metric tons of zinc concentrate and
100,000 tons of lead concentrate a year.

Antam, which owns 20 percent of Dairi, and Zhongjin Lingnan will fund the offer through cash and debt,
the statement said. The bid is subject to a number of conditions and includes a break-fee of A$5 million
payable to Antam and Zhongjin Lingnan.

Euroz Securities Ltd. is the financial adviser to Herald and Blakiston & Crabb is acting as legal adviser.
Antam and Zhongjin are being advised by Macquarie Capital Advisers, while Blake Dawson is acting as
their Australian legal adviser.

To contact the reporters on this story: Madelene Pearson in Melbourne on

mpearson1@bloomberg.net ; Naila Firdausi in Jakarta at nfirdausi@bloomberg.net .

Last Updated: January 30, 2008 05:10 EST

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http://www.bloomberg.com/apps/news?pid=20670001&refer=australia&sid=a_ydTs9cVass 2/3/2008